By Welcome Gogobo
Corporate governance is the system of rules, practices, and processes directed and controlled by an organization or industry.
Corporate governance essentially involves balancing the interests of a company’s many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community.
Since corporate governance also provides the framework for attaining a company’s objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure to increase accountability and facilitate prudent management. Compliance is the process through which companies demonstrate that they have conformed to specific requirements in laws, regulations, contracts, strategies, and policies.
What Is Governance, Risk Management, and Compliance (GRC)?
The overall purpose of GRC is to reduce risks and costs and duplication of effort. It is a strategy that requires company-wide cooperation to achieve results that meet the three essential functions’ internal guidelines and processes.
The three elements of GRC are:
· Governance, or corporate governance, is the overall system of rules, practices, and standards that guide a business.
· Risk, or enterprise risk management, is identifying potential hazards to the business and acting to reduce or eliminate their financial impact.
· Compliance, or corporate compliance, is the set of processes and procedures that a company has to make sure that the company and its employees are conducting business legally and ethically.
Today’s organizations work harder than ever to adapt to a rapidly changing world. They require effective corporate governance that can help them increase their accountability and avoid significant disasters while being more responsive to stakeholder concerns and more transparent with investors. From the technical responsibilities of a board to the nuances of guiding an organization through contemporary challenges, the corporation gets a comprehensive overview of the role of corporate governance and gains critical insights into the realities of board service.
The need for compliance documentation
The regulatory context demands a high level of transparency and accountability from all corporate businesses. A rigorous and disciplined compliance process supports and sustains the corporate governance and risk management systems and structures that direct the business activities.
In general, the compliance function must assist in implementing related compliance documents that protect the integrity of the organization’s compliance program and provide evidence that the organization is compliant with applicable laws, regulations, and program requirements.
In effecting and managing this, one needs a compliance process to implement a compliance risk management whereby a compliance universe is determined, and the applicable laws and regulations are rated, managed, and monitored.
The approach is to roll out the compliance risk approach guided by the phases for its implementation.
· Compliance risk identification
· Compliance risk assessment
· Compliance risk management
· And Compliance risk monitoring